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Doj Audit of the Intergovernmental Agreement Detention Space Negotiation Process 2011 Partb

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EXHIBIT 3-3: CALCULATING AND APPLYING ADJUSTED CORE RATES

Source: OIG depiction of eIGA adjusted core rate model

To determine the adjusted core rate for a facility, eIGA modifies the
base rate according to the following facility attributes: the average annual
wage of county government employees, the prisoner-staff ratio, the type of
facility (county, state, multi-jurisdictional, or private), and its locality. The
adjusted core rate model attempts to quantify a fair and reasonable

23

estimated jail-day rate considering these attributes for each requesting
facilit . Accordin to OFDT rice anal sis guidelines, if the proposed jail-day
rate
the adjusted core rate, the USMS
can consider the proposed rate as fair and reasonable. 26
In our audit, we reviewed how the adjusted core rate model, as
applied, used compiled detention pricing data and unique facility attributes
to establish an adjusted core rate for each state and local detention facility.
Our review determined that eIGA uniformly applied detention facility
attributes and generally calculated adjusted core rates accurately.
We next assessed whether USMS s ecialists
identified
proposed rates that did not
. As shown
in Exhibit 3-4, eIGA automatically displayed the
rates. USMS specialists were therefore able to identify readily whether
proposed or negotiated rates aligned with the adjusted core rate.

EXHIBIT 3-4:

Source: eIGA

Jail-day rates do not normally include costs associated with
transporting detainees to trials or medical appointments. 27 However, about
10 percent of detention facilities proposed a negotiated jail-day rate that
included both detainee housing and transportation costs. While it may be
reasonable for USMS specialists to negotiate a higher jail-day rate with these
facilities to capture their transportation costs, the USMS does not usually
pay for transportation as part of the jail-day rate. As a result, eIGA does not
consider transportation costs while calculating the adjusted core rate.
Therefore, when the detention facility proposes a rate that includes
transportation costs, the USMS specialist cannot readily compare the

27 Detention facilities usually charge a separate hourly guard rate for transportation
services or do not provide any transportation services.

24

facility's proposed rate to its adjusted core rate and therefore cannot easily
ascertain whether the proposed rate is fair and reasonable.
Most detention facilities did not request jail-day rates with
transportation costs included, so this issue did not affect the majority of jailday rates we sampled. However, because the USMS does on occasion
include transportation costs in jail-day rates, we believe that elGA should be
adjusted so that it has the ability to provide an adjusted core rate that
includes transportation costs. We recommend that the OFDT update elGA to
calculate an adjusted core rate that includes transportation costs for
requesting facilities, when applicable.
Technique 2: JOEl Data (Reported Operating Costs)
Requesting facilities provide JOEl data when they submit applications
for a jail-day rate. JOEl data details a facility's operating costs for the most
recent budget year and estimated costs for the next year. USMS specialists
can then use this information to calculate how much a facility spends per
detainee each day. Exhibit 3-5 shows how USMS specialists should calculate
estimated jail-day rates with JOEl data.

EXHIBIT 3-5: FORMULA TO USE TO CALCULATE ESTIMATED
JAIL-DAY RATES USING JOEl DATA

Total Annual Operating Costs
Per JOEl Data
of Detainees) (365 DayS'
( Number
Held Each Day
1

Calculated
Jail-Day
Rate

Source: OIG analysis of OFDT gUidelines and IGA files

Our audit found that USMS specialists (1) have inconsistently applied
the formula to calculate JOEl rates and (2) have not used estimated JOEl
rates to negotiate jail-day rates.

25

With regard to how USMS specialists inconsistently calculated
estimated JOEl rates, we found that USMS specialists did not use the same
type of figures to populate the "number of detainees held each day" in the
JOEl formula. Some specialists used the facility's total-rated capacity, which
is the maximum number of detainees allocated to the facility by a state or
local official. Other specialists used the facility's average daily population, a
figure reported by the requesting facility that should be based on detention
statistics over a period of time. According to the OFDT, a requesting
facility's total-rated capacity is the preferred figure to use in calculating the
jail-day rate because it is readily verifiable. This is not the case with a
facility's average daily population, which, according to the OFDT, is difficult
to verify and can be erroneously compiled or easily manipulated.
We determine that USMS specialists used JOEl data to help justify only

6 jail-day rates out of the 25 sampled IGAs. We reviewed the IGA files and
determined that in most of these 6 cases, USMS specialists calculated 2 sets
of estimated JOEl rates - one rate used the facility's average daily
population and another rate used its total-rated capacity. In each of these
cases, the JOEl rate calculated using average daily population was higher
than the rate calculated using total-rated capacity.28 As shown by Exhibit
3-6, while the average negotiated rate for these IGAs was $96, the average
JOEl rate based on total-rated capacity was $89 and the average rate using
average daily population was $120. However, the USMS specialists only
cited the higher JOEl estimates using average daily population in the IGA
price negotiation memorandum (which is compiled to justify the negotiated
rate). If the USMS specialist had applied the correct JOEl rate using totalrated capacity, the USMS specialist would have found that, based on
reported costs, facilities would have spent an average of $7 less (instead of
$24 more) than the average negotiated rate.

28 Because these six facilities were not at 100 percent capacity, the JOEl rate
calculated with average daily population meant that the total operating expenses were
divided by a lower figure than the facility's respective total-rated capacity. In cases where a
facility holds more detainees than its total-rated capacity, a JOEl rate applying average
daily population may be lower.

26

EXHIBIT 3-6: ESTIMATING JOEl RATES USING TOTAL-RATED
CAPACITY AND AVERAGE DAILY POPULATION FIGURES

Detention
Detention
Detention
Detention
Detention
Detention

Facili
Facili
Fadti
FacUi
FacUi
Fadti

9
25
18
24
8
1

75
75
95
118
148
160

67
105
114
118
176
140

95
118
119
106

0
31
4 •
27
0
18

AVERAGE OF RATES

112

120

96

7

65
72

Source: IGA files

Estimating JOEl rates by using average daily population instead of
total-rated capacity helped detention facility 24 and detention facility 25, as
shown in Exhibit 3-2, receive the largest amount of funding in excess of
reported operating costs among the 25 IGAs we sampled during this audit.
Considering also that USMS specialists only intermittently applied JOEl data
in 6 of the 25 sampled IGAs, it appears as though USMS specialists at times
selectively used JOEl data to justify high jail-day rates.
In April 2010, the OFDT updated elGA to generate automatically an
estimated JOEl rate using the more reliable and verifiable total-rated
capacity figures. The elGA system now provides the USMS specialist with
the JOEl rate so they can readily consult it during negotiations, as shown by
Exhibit 3-7.

EXHIBIT 3-7: SCREENSHOT OF REQUESTING FACILITY JOEl RATE
AUTOMATICALLY CALCULATED IN eIGA

Source: eIGA (accessed December 7, 2010)

27

In our opinion, the fact that JOEl data was only used to justify 6 out of
25 of the sampled IGAs demonstrates that USMS specialists were not
consistently considering operating costs when negotiating jail-day rates. By
not systematically using JOEl data for negotiations, the USMS was ignoring
information that could be used to provide an important check on the
reasonableness of the offered jail-day rate.
Technique 3: Market Research
The third price analysis technique USMS specialists use to evaluate
whether a proposed price is fair and reasonable is market research. USMS
specialists used this technique to help justify a negotiated jail-day rate in
20 of the 25 sampled IGAs.
Under the FAR, market research includes collecting and analyzing
available pricing information of the same or similar items from other
suppliers and comparing these prices to current or proposed prices. 29 To
perform market research, USMS specialists have to compare the proposed
jail-day rate to rates of detention facilities that are similar to the requesting
facility. When determining whether a detention facility is similar to the
requesting facility, USMS specialists should consider, among other things,
the facilities' size, age of construction, location, and level of competition
between other detention facilities in the local USMS district. In addition, the
number of detention facilities - and therefore the complexity of the
detention space marketplace - varies widely among USMS districts.
Accurate market research therefore first requires USMS specialists to
identify how many other facilities exist in the same detention space market
as the requesting facility. The specialist needs to determine which facilities
are similar, and therefore comparable to the requesting facility. Specialists
should then document their comparison of the proposed rate to a sufficient
number of jail-day rates of similar detention facilities.
Identifying which facilities in the same district are comparable presents
challenges because the characteristics and services offered by different
detention facilities can vary widely. For example, the size of facilities can
range from a small county jail that has a few beds to a large jail with several
thousand beds. Facility staffing ratios, which also affect per-detainee facility
operational costs, can be high for a large modern facility or low for a small
or older medium-sized facility. Facilities closer to large metropolitan areas
usually have higher jail-day rates than facilities located in more rural areas,
even within the same USMS district. Other factors that affect comparability
29

FAR § 15.404-1(b)(2)(vi) (2010).

28

of detention facilities include their detainee capacities and proximity to a
federal courthouse.
USMS specialists consult Justice Detainee Information System (JDIS)
reports to identify facilities within the same USMS district as the requesting
facility. The JDIS reports sort facilities by USMS district and include various
attributes that can help USMS specialists determine which detention facilities
may be similar, including where a facility is located, what type of detainees
(adult, juvenile, male or female) it holds, and the number of USMS detainees
held by the facility per day. However, JDIS reports used by the USMS
specialists only include information for detention facilities that have been
used by the USMS to house detainees in the past and do not list all the state
and local facilities that have detention space available within a given district.
To fill this gap, in 2007 the OFDT began providing USMS specialists with
third-party research materials that listed detention space attributes of nearly
all state and local detention facilities in the United States.
However, based on our review of 25 sampled IGAs, USMS specialists
have not consistently used OFDT-provided third-party materials to help
identify a broad number of comparable detention facilities within a USMS
district. Our analysis of the agreement files for these 25 IGAs also
determined that USMS specialists did not clearly detail the factors used to
identify whether a facility in the same detention space market was
comparable to a requesting detention facility. Without considering whether
detention facilities are similar - and therefore their rates comparable USMS specialists should not use the market research technique to justify fair
and reasonable rates.
Our review of how USMS specialists performed market research also
determined that some USMS specialists primarily used the highest detention
facility jail-day rates to compare to proposed "ail-da rates. For exam Ie, in
,
January 2009 detention facility 19, located in
requested a 52 percent increase to its jail-day rate, raising its jail-day rate
from $33 to $50. According to USMS records, detention facility 19 had been
providing housing to an average of over 100 detainees each day, or about
40 ercent of the DOJ detainee 0 ulation of the
. To justify a negotiated rate, the
USMS specialist compared detention facility 19's proposed rate to rates of
just three other facilities. These three facilities had jail-day rates that
ranged between $40 and $50, which were the highest jail-day rates paid by

29

the district at the time. 30 After a series of discussions and at least one
counteroffer, the USMS specialist used this comparison to help justify a $44
jail-day rate with detention facility 19. This new rate represented a 33
percent increase over detention facility 19's prior $33 jail-day rate.
However, according to USMS records there ma have been as many
as 19 facilities located in the
whose
rates could have been used to compare against detention facility 19's
proposed rate. The rates of these other facilities ranged from $7 to $40 per
day - generally much lower than the rates of the three facilities we
determined the USMS specialist compared to the proposed rate.
Because the USMS specialists had the rates of 19 detention facilities
available in JDIS at the time of the negotiation, we believe the USMS
specialist should have compared detention facility 19's proposed rate to the
rates of more than just three facilities. Had the specialist included the
facilities with lower rates, the comparisons would have clearly demonstrated
that the $44 proposed rate provided detention facility 19 with the highest
jail-day rate of any facility in the district. Moreover, because the three
compared rates were among the most expensive, we believe the comparison
performed by the specialist helped make the $44 negotiated rate appear
more reasonable than it actually was.
We recommend that the OFDT and USMS ensure that when USMS
specialists use the market research technique USMS specialists: (1) consult
third-party research materials to identify the universe of facilities that
compose the detention space market of the requesting detention facility;
(2) document the specific comparability factors of each requesting facility
and apply these factors consistently to the universe of detention facilities to
identify as many similar facilities as possible; and (3) compare proposed or
negotiated facility rates to all facilities that, based on documented
comparability factors, are similar to the requesting facility.31

30 We also noted that the
located in the
detention facility located in the
31 Based on prior OFDT gUidance, we believe that the comparability factors
considered by USMS specialists should include, among other things: (1) market conditions,
such as inflation or deflation of detention space prices; (2) the quantity or sizes of the
facilities; and (3) the geographic location of facilities, including each facility's proximity to a
federal courthouse.

30

Technique 4: Historical Government and Contract Prices
According to price analysis guidelines, a proposed or negotiated rate
also may be justified if it aligns with historical government and contract
rates. Under the FAR, comparisons between proposed rates and historical
prices can be performed only if the previous prices are deemed objectively
reasonable and were charged for a similar serviceY
The OFDT has instructed USMS specialists to apply private detention
facility and nearby BOP federal detention center rates when performing price
analysis using the historical price technique. The private detention facility
rates are established by contracts, while the BOP bases federal detention
center rates on costs. To facilitate using the historical price technique to
justify IGA proposed or negotiated prices, the OFDT includes an updated list
of BOP and private facility jail-day rates in the price analysis guide compiled
for USMS specialists each year.
We determined that USMS specialists applied the historical price
technique to negotiate 9 of the 25 IGA jail-day rates sampled by the audit.
However, the specialists did not consistently evaluate whether BOP federal
detention centers and private facilities were similar and therefore had rates
that could be compared to the requesting facility's proposed rate. For
example, th~listwho negotiated the jail-day rate for detention
facility 4 in _
compared the re uestin facilit's ro osed jail~ r i c a lrates for the
_,andthe
While we did not determine that the use of the historical price technique
resulted in excessive costs to the USMS, we did find that the USMS specialist
did not first ensure that these two facilities had attributes that were similar
to detention facility 4 before com arin rates. The total-rated detention
capacities for both the
and the
were each nearly three times that of detention facility 4. In addition, the
was located more than 500 miles away from the requesting
facility, and neither compared facility provided bed space for female
detainees, as detention facility 4 did.

32

FAR § 15.404-1(b)(2)(ii) (2010).

31

The historical price technique requires that negotiators compare
proposed prices to previous government contract prices for items that are at
least similar. When USMS specialists compare jail-day rates of detention
facilities that have dissimilar attributes - such as capacities, geographic
locations, and service offerings - we believe that the historical price
technique does not provide an adequate basis to justify a fair and reasonable
rate. We therefore recommend that the OFDT and USMS issue guidelines to
require that USMS specialists identify whether government or contract
facilities have similar attributes to the requesting facility before using these
jail-day rates to justify a negotiated jail-day rate.
We also believe that the OFDT should incorporate in its price analysis
guide the rates that ICE establishes with the same or similar facilities in the
same geographic area. As of February 2010, ICE had established about
250 of its own jail-day rates with state and local facilities across the United
States. By comparing the lists of facilities used by ICE to the lists of
facilities used by the USMS, we identified 32 instances where the same
facility established separate jail-day rate agreements with the USMS and
ICE. As shown in Exhibit 3-8, 12 of these 32 facilities charged the USMS a
higher jail-day rate, while 3 facilities charged ICE a higher rate. At least
15 of the 32 facilities charged the USMS and ICE the same rate. 33 The
discrepancy between the USMS and ICE jail-day rates at the same facility
ranged from $2 to $28.

33

As shown by Exhibit 3-8, ICE was not able to prOVide us data on rates of two

facilities.

32

EXHIBIT 3-8: DETENTION FACILITIES WITH SEPARATE
USMS AND ICE DETENTION AGREEMENTS

=+-_-=9:..=5~-+_---J'-=2:.=8.L..-_-+---=..:=----l

Detention Facill
Detention Faclli
Detention Facili

26
27
28

-+_....:::6:,.:.7
57

Detention
Detention
Detention
Detention
Detention

Facili
Faclli
Faclli
Facill
Facill

29
30
2
31
32

Detention
Detention
Detention
Detention
Detention
Detention
Detention
Detention
Detention
Detention
Detention
Detention
Detention
Detention

Faclli
Facili
Facill
Facili
Facili
Facili
Facill
Facill
Facili
Facili
Faclli
Faclli
Faclll
Facili

20
6
33
34
8
35
36
37
21
4
38
23
12
18

-+_....:::6=..::2=---+-_-=6=..::2=---+_ _.-;o=--_--l_ _-----l
-+_....:::8=..::5:...--+-_-=8:..=5:...--+_ _.-;0=--_--l_ _-----l
80
80
0
-+---=-=:...--+----=-=--+----=----_t_--------l
53
53
0
=-t--:8=-=5:----+---:8'"=5:---+---0=-------i-------i
95
95
0
-+-...=....;;;.':----+--...=....;;;.:---+----=-----t-,.----I
-+_.:.1.=.;10=---+-_=-1:..:10=---+_ _.-;0=--_--l_ _-----l
-+_.:.10.=.;5=---+-_=-10.=.;5=---+_ _.-;0=--_--l_ _-----l
109
109
0
-+-~=----+--~=---+----=----_t_---=-l
-+_.:.1.=.;19=---+-_=-1:..:19=---+_ _.-;0=--_--l_ _-----l
-+_....:::6:,.:.7_-+-_-=6:..:..7_-+_ _.-;0=--_--l_ _-----l
75
75
0
-t--::-::---+---::-::--+-=----=----_t_----I
-+_-=5:..=5~-+-_ _=5:..=5~-+_ _.-;0=--__=_--,...4,__------l
-t_-=5:..=5:...--+-_-=5:..=5_-+_ _-'0=--_--l_ _-----l
54
54
0
--I
-+_-=6:..=0:...--+-_ _=5:..:..7=--+_ _.....:3=--_--l--=U~S~M:..::S:.._....j

Detention Facili
Detention Faclli
Detention Faclll

22
7
14

Detention Faclli
Detention Facili
Detention Facili

15
10
3

Detention
Detention
Detention
Detention
Sources:
Note:

63

6

-+--=6O":'2--+--....:::64=--+--~2~"'--"'---l-==---l

-t--::--::...---+--~~..-+----=----_t_

-t_....::5;.;::5:...--+---=5:..=0--+--.....:5=-----l--=U~S..:....M::..:=S__l

70

64

6

USMS

-t--:9:-::5:----+---:8:-:::6:----+--~9=--~----i--=U:.::::S..:....M;.;::S'-I

-t_-=-10=-:4-=---+-_-=9:-:::4_-+_ _...::;1~0--_t_...::;U~S..:....M::..:=S__l
78
68
10
USMS
'-t--:5=-=5:---t--=....:4:-:::5:---t--....::1'-=0---+--7U;.;::S,;,..M,:..::S:----i
-+_....:6:".:::9:...--t-_-=5;.;::9_-t_ _-=1:..=0_ _-+--=U:..=S;.:..M.:.;:S:.........j
80
69
11
USMS
-T-....:6=-=3:---t---:5;.;::1--t--....::1'-=2---+--=U;.;::S":-M,:..::S:----i
-t_....:8:-;::5:...--t-_....:7..::2=----t_ _.. .: 1:. ;:;3_ _-+--=U:..=S;.:..M.:.;:S:----i
72
47
25
USMS
-t-""""="':::---t--::-:---:::-'--r+=--~~---+-__=:::"':_'_":.........j

Facili 13
Facili 39
Facili 40
-t_.....:6=..:0=----+-..:....N:..:=o.....:D::....:a::..::t=a~-=--.:..:.n!..,.=a=-----+-.......:....::NL:.A~
Facili 41
-'-----=~9:..::1':---'-..:....N:..::o--=D::....:a:;.:t;.=.a--L____=-.:...:.nL..:a=-----'-.......:....::NL:.A....:----J
ICE detention data dated February 22, 2010, and USMS records
The listing provided by ICE did not include pricing data for these two facilities but
we identified them as an entries included in the USMS list of IGAs.

33

In our opinion, having the USMS and ICE separately negotiate for a
jail-day rate at the same state or local facility leads to increased rates
because the two agencies effectively compete against each other for the
same detention space. In March 2010, the USMS and ICE began taking
steps to help minimize the instances when they compete against each other
for the same detention space. In addition, the OFDT, USMS, and ICE have
formed a pricing strategy working group to exchange information on how to
improve the negotiation of detention costs.
We recommend that the OFDT and USMS require USMS specialists
using the historical prices technique to determine whether a requesting
facility has an ICE jail-day rate that can be used before finalizing a separate
jail-day rate for the USMS.

Summary of USMS Specialist Application of Price Analysis
Properly performed price analysis can help ensure that negotiated jailday rates are fair and reasonable to both the buyer (DOJ) and the seller
(state or local detention facility). We believe that the OFDT and USMS need
to consider JOEl information when evaluating proposed rates and ensure
that price analysis comparisons are performed using accurate and complete
information.
One of the most critical parts of price analysis is ensuring that USMS
specialists document both (1) the reasons they used certain price analysis
techniques over others and (2) the contemporaneous information used to
justify a negotiated jail-day rate. Our audit identified significant weaknesses
in the way the OFDT and USMS have implemented the IGA price negotiation
strategy. First, our sample of 25 IGAs determined that USMS specialists
have not been properly performing and adequately documenting price
analysis. Second, USMS specialists only used JOEl data to justify 6 out of 25
sampled negotiated rates. Third, even when JOEl data was used, jail-day
rates were not properly estimated using a facility's total-rated capacity.
We believe that the USMS's inconsistent use of JOEl data increased
the rates the USMS paid for detention services. Among the sampled IGAs,
the jail-day rates set with price analysis were, on average, $7 higher than
the rates would have been had the USMS based payments on costs alone.
By ensuring USMS specialists perform price analysis to consider not only the
rates of other detention facilities but also the costs detailed by the
requesting facility's JOEl data, we believe the OFDT and USMS will be in a
stronger position to negotiate fair and reasonable jail-day rates.

34

Recommendations
We recommend that the OFDT and USMS:
5.

Require that USMS specialists consistently use the estimated
JOEl and adjusted core rates automatically calculated by eIGA as
starting points to help negotiate lower jail-day rates.

6.

Require that USMS specialists document and their supervisors
approve the reasons that the market research or historical price
techniques are not used to justify and negotiate a fair and
reasonable jail-day rate.

7.

Ensure that USMS specialists using the market research
technique: (1) consult third-party research materials to identify
the universe of facilities that compose the detention space
market of the requesting detention facility; (2) document the
specific comparability factors of each requesting facility and
apply these factors consistently to the universe of detention
facilities to identify as many similar facilities as possible; and
(3) compare proposed or negotiated facility rates to all facilities
that, based on documented comparability factors, are similar to
the requesting facility.

8.

Issue guidelines to require that USMS specialists using the
historical price technique: (1) identify whether government or
contract facilities have similar attributes to the requesting facility
before using their jail-day rates to justify a negotiated rate and
(2) determine whether the requesting facility has an ICE jail-day
rate that can be considered and used before finalizing a separate
jail-day rate for the USMS.

We recommend that the OFDT:
9.

Update eIGA to calculate an adjusted core rate to include, when
applicable, transportation costs for requesting facilities.

35

CHAPTER FOUR
COST ANALYSIS
Under the FAR, when the government cannot negotiate a fair and
reasonable rate using price analysis, the government can evaluate vendor
cost data using "cost analysis. "34 Applied to the IGA negotiation, cost
analysis is a tool that USMS specialists should use to assess the requesting
detention facility's costs for allowability, accuracy, and completeness. This
technique involves more work than applying JOEl data as a price analysis
technique to estimate a jail-day rate. This is because with cost analysis the
USMS specialist assesses the allowability, accuracy, and completeness of the
costs reported by the requesting facility. With the JOEl price analysis
technique, the USMS specialist does not verify the costs submitted by the
detention facility.
Prior to OFDT's implementation of price analysis, the USMS generally
used cost analysis to set jail-day rates. Under this approach, detention
facilities requesting an IGA submitted cost data. USMS specialists reviewed
the data against the general cost tenets of the Office of Management and
Budget (OMB) Circular A-87, which state that costs must be:
•
•
•
•
•
•
•

necessary and reasonable;
allocable;
authorized or not prohibited under state or local laws;
in conformance with laws, regulations, and terms and conditions
of the agreement;
accorded consistent treatment;
in compliance with Generally Accepted Accounting Principles;
and
adequately documented.

Once the USMS specialists determined that the costs were allowable,
the USMS specialists used the costs to calculate a jail-day rate.
Reasons to Use Cost Analysis
We believe there are at least two circumstances when the USMS
should not use price analysis alone to justify a jail-day rate as fair and
reasonable. First, when different price analysis techniques yield very
different or large ranges of estimated or averaged jail-day rates, it is difficult
for the USMS to determine that a specific jail-day rate is fair and reasonable.
The second instance is when the USMS local district experiences a shortage
34

FAR § 15.404-1(a)(4) (2010).

36

of detention space and therefore has a dire need to find space for its
detainees, sometimes with facilities requesting rates higher than what price
analysis determined would have been fair and reasonable. When this
occurred, we found that USMS specialists cited the detention space shortage
as a reason to justify a higher jail-day rate. We believe cost analysis could
have been used in these circumstances to evaluate facility costs and help the
USMS negotiate jail-day rates that: (1) ensure the requesting facility
receives funds sufficient to cover expenses and (2) represent an appropriate
use of federal detention funds.

Large Ranges of Price Analysis Technique Results
Our sample of 25 IGAs identified several instances when the
application of different price analysis techniques resulted in a large range of
potential jail-day rate prices. For example, the USMS specialist who
negotiated the $118 jail-day rate for detention facility 24 performed three
different price analysis techniques: adjusted core rate, JOEl estimates, and
market research. The facility requested a rate of $118. The estimated JOEl
rate (based on total-rated capacity) was $91, and the adjusted core rate was
$69. However, market research yielded a range of prices that could have
supported a rate of up to $125. This resulted in a $56-difference - or range
of 62 percent from the estimated JOEl rate - in prices yielded by different
price analysis techniques.
We believe this large range should have been identified by the USMS
specialist and resulted a finding that price analysis was not sufficient to
determine whether a rate of $118 was fair and reasonable. Instead of
performing cost analysis, the USMS specialist offered detention facility 24
jail-day rates of $104 and $111, based on price analysis results. Both of
these offers were rejected by detention facility 24, which held to its
requested jail-day rate of $118.
To obtain justification for detention facility 24's $118 rate
specialist sent an e-mail to local USMS officials with the
asking whether the district had an "operational need" to use detention
facility 24, which could then be used to justify the requested $118 rate. A
loca~ed that detention facility 24 was the only jail used by
the _ . Furthermore, the local USMS official "could only
think of two locations" that could house detainees other than detention
facility 24. Both of these facilitie~ed to be over 110 miles away
from both federal courthouses in _ , and therefore were
operationally unfeasible. Citing the operational needs of the local USMS
district, the USMS specialist found that detention facility 24's demanded jailday rate of $118 was justified.

37

In this case, the large range in potential jail-day rates derived from
different price analysis techniques presented an opportunity for the USMS to
use cost analysis. Had the USMS specialist performed cost analysis, the
specialist might have found a reason for the discrepancy between the
estimated JOEl rate and other price analysis rates. Cost analysis could also
have placed the USMS in a position to respond to the facility's request for a
higher $118 jail-day rate and determine whether the facility was seeking
excessive profits. We recommend that the OFDT and USMS require USMS
specialists perform cost analysis on the JOEl data to evaluate and verify the
requesting facility's operating costs when: (1) different price analysis
techniques yield a very large range of results that do not align with price
analysis (estimated JOEl rates) or (2) the detention facility rejects offered
price analysis rates.
Lack of Avai1able Detention Space

The USMS conducts annual detention surveys to collect data pertaining
to bed space availability, detainee transportation, travel distances, detainee
security, and employee safety. These surveys provide the USMS with
information on the status of detention space demand in each district. The
surveys also report three possible detention space ratings for each USMS
district office, as shown in Exhibit 4-1.

38

EXHIBIT 4-1: LOCAL USMS DETENTION SPACE RATINGS

1. No Problem. The local USMS <:lemand f0r I:!>ed spaee does not excee<:l
the supply of bed spaee available at B@P <:letenti0n centefs, state and
local facilities that have IGAs, an<:l private jails with USMS c0ntracts.
2. Serious. The 10cal USMS <:listrict is ma~in~ multij:)le trij:)s to vari0us
detenti0n faeilities, S0me 0f whieh may I:!>e 0utsi<:le the <:listrict's
boundaries, to h0use all 0f Its detainees. C0mmuting <:listanees f0r USMS
dej:)uties that avera~e m0re than 1-h0ur result in m0re 0vertime alil<:l
inerease the C0neern f0r the securiby am:! safety 0f USMS emj:)10yees an<:l
<:letainees.
3. Emergency. The 10Gal USMS <:listriet has n0 I:!>e<:l sj:)aee availal:!>le an<:l
therefore is f0rced to use the I:!>e<:l s!'!>a<::e 0f other USMS <:listricts to h0use
its detainees. Resultin~ transj:)0rtati0n time an<:l eff0rt inGreases can:
(1) cause j:)r0blems with j:)r0duGin~ <:letainees f0r court aj:)j:)earanees, and
(2) je0j:)ar<:lize the safety 0f USMS emj:)10yees an<:l <:letainees.
Source: USMS Detention Status Surveys

For FY 2009, 52 out of 218 USMS district sub-offices received a
detention bed space status of "serious," while 17 were rated as
"emergency." Out of the sampled 25 IGAs, we identified at least 2 IGAs
when USMS specialists disregarded p r i c ~ o rthe IGAs
established w ~ 22 in _
and detention
facility 16 in _ , the USMS specialist cited district-level
detention space shortages to justify negotiated rates that we determined far
exceeded cost rates based on the facilities' respective JOEl data.
The IGA negotiation documented for detention facility 22 in particular
illustrates how local USMS detention space has affected how the USMS
justifies jail-day rates. In December 2008, detention facility 22 requested a
28 percent jail-day rate increase from $81 to $104. Although the requested
rate was only $3 higher than detention facility 22's adjusted core rate of
$101, the requested rate was $9 over its estimated JOEl rate of $95.
USMS detention surveys, however, identified that the
had a "serious" detention space shortage. Local USMS
officials reported to the USMS specialist that detention facility 22 provided
about a third of the district's detention space - 200 detainees per day - and
thus was critical to the operations of the district. The USMS specialist did
not use the $95 estimated JOEl rate as a starting point to propose a lower
jail-day rate to detention facility 22. Furthermore, the USMS specialist did
not perform cost analysis to assess why the JOEl rate was lower than the
39

$101 adjusted core rate or detention facility 22's $104 requested rate.
Instead, the USMS specialist cited the local USMS district's need for
detention space as the primary justification in the IGA for detention
facility 22's $104 rate.
In addition based on USMS records, we found that the
could have used 25 other detention facilities with
IGAs besides detention facility 22 to fulfill its detention space needs. The
average jail-day rate for these facilities was $73, and out of the 26 facilities,
16 housed both adult males and females. However, at the time this IGA was
was using only 10 of these
established, the
facilities.
Detention facility 22's request for a $104 jail-day rate represented a
28 percent increase over its prior rate, and was $9 more than its estimated
JOEl data rate. During the year prior to the negotiation of this IGA,
detention facility 22 held an average of 200 detainees a day. Considering
these points, we believe the USMS specialist should have tried to apply costbased estimates, such as the estimated JOEl rate, as a starting point to the
negotiation. In our opinion, if the JOEl rate was not acceptable to the
facility the USMS specialist should have then assessed the costs to
determine if the JOEl data was inaccurate. Cost analysis could also help
determine whether the facility was trying to receive excessive profits from
housing USMS detainees. If this appeared to have been the case, we believe
that the USMS should have sought proactively to obtain detention space at
other, potentially more cost-effective facilities.
Therefore, when a local USMS district relies on the requesting facility
to house a large or disproportionate number of detainees and the requesting
facility demands an increase to its jail-day rate that cannot be justified using
price analysis (JOEl estimates) or cost analysis (evaluating JOEl data), we
recommend that the OFDT and USMS require that USMS districts implement
a detention space action plan to move its detainees to other detention
facilities. Such an action plan must require that the OFDT and USMS work
with responsible district officials to solicit IGA applications aggressively from
facilities - even those that may not be as operationally convenient as the
facility demanding an unjustifiable jail-day rate. The detention space action
plan should then be used by the OFDT and USMS to expedite negotiations
with and transfer detainees to more reasonably priced facilities.

40

Moreover, the fact that USMS specialists have cited detention space
shortages to justify high jail-day rates highlights the shared need of the
OFDT and USMS to identify additional detention facility applicants that can
help address district-level "serious" or "emergency" detention space
shortfalls.
Since 2007, OFDT officials have attended several meetings and
conferences for state and local detention personnel, such as the annual
American Correctional Association's National Conference. At these events,
OFDT officials set up booths to demonstrate how elGA works and how to
request an account. However, the USMS and OFDT have not developed
national or district-level strategies to solicit additional local detention
facilities to apply for IGAs. We recommend that the OFDT and USMS require
that districts designated by the annual detention survey with "emergency" or
"serious" detention space needs to solicit additional IGA applications from
facilities within those districts. Such an initiative to promote IGAs could
provide the USMS with a better market for detention space by enhancing
competition between facilities available to house US~S detainees.
USMS Specialist Cost Analysis Training
Based on our IGA file review and interviews with OFDT and USMS
officials, we determined that USMS specialists were generally under the
impression that estimating rates using JOEl data constituted cost analysis.
As a result, USMS specialists did not consistently evaluate JOEl data when
the price analysis rate was rejected by the requesting detention facility.
However, based on the OFDT's negotiation strategy, cost analysis should be
used when price analysis techniques (including estimated JOEl rates) does
not result in a rate that is both justified and acceptable to both the USMS
and the requesting facility.
Our review of OFDT and USMS training materials provided to USMS
specialists concluded that the way the materials treated cost analysis
contributed to the USMS specialist confusion over the role of cost analysis in
the IGA negotiation process. The training material does not specifically
describe how USMS specialists should perform cost analysis to assess the
accuracy and allowability of the requesting facility's JOEl data. We
determined that there are various methods that USMS specialists can apply
to perform cost analysis. They can verify JOEl data by: (1) performing
audits of facility costs, (2) assessing historical cost data collected from the
same facility by the USMS in the negotiation of prior IGAs; or (3) evaluating
available expenditure or budget data for similar detention facilities.

41

Furthermore, the September 2010 training materials that the OFDT
provided to USMS specialists describe cost analysis as just another price
analysis technique instead of a separate process that should be used to
evaluate JOEl data. As discussed previously, using cost analysis differs from
estimating rates based on JOEl data because cost analysis evaluates the
requesting facility's reported expenditure information. We recommend that
the OFDT and USMS develop guidelines and conduct training to ensure that
USMS specialists know how to perform cost analysis properly to assess the
allowability, accuracy, and completeness of the submitted JOEl data.

Recommendations
We recommend that the OFDT and USMS:
10.

Require that USMS specialists perform cost analysis on the JOEl
data to evaluate and verify the requesting facility's operating
costs when: (1) different price analysis techniques yield a very
large range of results that do not align with estimated JOEl rates
or (2) the detention facility rejects offered price analysis rates.

11.

Implement a detention space action plan to move detainees to
other detention facilities whenever a requesting facility that is
used to hold a large or disproportionate number of USMS
detainees demands an increase to its jail-day rate that cannot be
justified by price analysis or cost analysis.

12.

Require that districts designated by the annual detention survey
with "emergency" or "serious" detention space needs to solicit
additional IGA applications from facilities within those districts.

13.

Develop guidelines and conduct training to ensure that USMS
specialists know how to perform cost analysis properly to assess
the allowability, accuracy, and completeness of the submitted
JOEl data.

42

CHAPTER FIVE
IGA OVERSIGHT
Once USMS specialists negotiate a preliminary (or agreed-upon) jailday rate with a detention facility, USMS and OFDT officials need to review
and approve the preliminary rate before it can be finalized. Exhibit 5-1
outlines how these officials review preliminary jail-day rates.

EXHIBIT 5-1: POST-NEGOTIATION IGA REVIEW PROCESS

Source: OIG depiction of OFDT and USMS IGA review gUidelines

Review of USMS Specialist Jail-Day Rate Justifications
First, USMS specialists prepare price negotiation memoranda detailing
the reasons why the proposed negotiated jail-day rate is justified. These
memoranda are routed to USMS specialist supervisors and OFDT
coordinators for review and concurrence. If these officials determine that

43

the memoranda is complete and accurate, the negotiated jail-day rates are
approved and can be finalized.
Under the FAR, the IGA file should include a price negotiation
memorandum summarizing: (1) the techniques used and the facts
considered by the USMS specialist to establish a pre-negotiation position and
(2) how the rate was ultimately negotiated with the detention facility. Price
negotiation memoranda also help the OFDT and USMS comply with the FAR
requirement that negotiators document the "principal elements" of each
negotiation. 35 A complete and accurate price negotiation memorandum
should therefore demonstrate to a third-party why the preliminary jail-day
rate is fair and reasonable.
OFDT coordinators stated they review price negotiation memoranda for
detail and clarity. If they note weaknesses in conclusions or in facts of the
memorandum, OFDT coordinators are supposed to contact the USMS
specialists and provide them with recommendations for improvement.
However, in one instance we found that the OFDT coordinator
recommended that the USMS specialist remove an entire section of the price
negotiation memorandum, not because it was inaccurate, but because the
section did not support a higher negotiated jail-day rate. We also noted that
USMS specialists did not always update price negotiation memoranda based
on the OFDT's recommendations.
We recommend that the OFDT and USMS implement a procedure
within eIGA that formalizes and documents the OFDT coordinator review of
price negotiation memoranda. Such a procedure should: (1) require that
USMS specialists respond to each OFDT coordinator recommendation;
(2) provide the OFDT coordinator with the ability to ensure that the USMS
specialist responses address the recommendations; and (3) preserve the
OFDT recommendations and USMS responses as part of the permanent IGA
file.
Finalizing the IGA
If OFDT officials approve the negotiated jail-day rate, the USMS
specialist prepares the final IGA forms for the signature of USMS and
requesting facility officials. Once the IGA forms are signed, the USMS
35 These principle elements include: (1) the purpose of the negotiation, (2) a
description of what was negotiated, (3) the type and source of data used to support the
reasonableness of the price established by negotiations, (4) the government's objectives
before negotiations began, and (5) an explanation of any significant differences between the
government's initial negotiation objective and the negotiation results.

44

specialist should upload a scanned copy of the signed IGA, the justification
memorandum, and the detention facility inspection report to eIGA.
Our audit revealed that some IGA documents were only maintained in
the hardcopy IGA files and were not uploaded to eIGA. Because eIGA should
serve as the official system of record for the IGA negotiation, we recommend
that the OFDT and USMS ensure USMS specialists upload all documents used
to negotiate the jail-day rate into eIGA.

Recommendations
We recommend that the OFDT and USMS:
14.

Implement a procedure within eIGA that formalizes and
documents the OFDT coordinator review of price negotiation
memoranda. Such a procedure should: (1) require that USMS
specialists respond to each OFDT coordinator recommendation;
(2) provide the OFDT coordinator with the ability to ensure that
the USMS specialist responses address the recommendations;
and (3) preserve the OFDT recommendations and USMS
responses as part of the permanent IGA file.

15.

Ensure USMS specialists upload all documents used to negotiate
the jail-day rate into eIGA.

45

ACRONYMS
BOP

Federal Bureau of Prisons

DOJ

Department of Justice

elGA

Electronic Intergovernmental Agreement System

FAR

Federal Acquisition Regulation

ICE

Bureau of Immigration and Customs Enforcement

IGA

Intergovernmental Agreement

JDIS

Justice Detainee Information System

JOEl

Jail Operating Expense Information

OFDT

Office of the Federal Detention Trustee

OIG

Department of Justice Office of the Inspector General

OMB

Office of Management and Budget

USMS

United States Marshals Service

46

STATEMENT ON INTERNAL CONTROLS
As required by the Government Auditing Standards, we tested, as
appropriate, internal controls significant within the context of our audit
objectives. A deficiency in an internal control exists when the design or
operation of a control does not allow management or employees, in the
normal course of performing their assigned functions, to timely prevent or
detect: (1) impairments to the effectiveness and efficiency of operations,
(2) misstatements in financial or performance information, or (3) violations
of laws and regulations. Our evaluation of the internal controls employed by
the Office of the Federal Detention Trustee (OFDT) and the U.S. Marshals
Service (USMS) was not made for the purpose of providing assurance on
either agency's internal control structure as a whole. OFDT and USMS
management are responsible for the establishment and maintenance of
internal controls.
As noted in this report, we identified certain deficiencies in the internal
controls employed by both the OFDT and USMS that are significant within
the context of the audit objectives and based upon the audit work performed
that we believe adversely affect the OFDT and the USMS's ability to
negotiate fair and reasonable jail-day rates for Intergovernmental
Agreements (IGAs). Internal control deficiencies include the USMS and
OFDT not ensuring either: (1) the completeness and accuracy of data
submitted by detention facilities applying for an IGA or (2) that USMS
specialists consistently and completely document price analysis research and
results.
Because we are not expressing an opinion on the internal control
structure in place at OFDT and USMS as a whole, this statement is intended
solely for the information and use of the OFDT and USMS. This restriction is
not intended to limit the distribution of this report, which is a matter of
public record.

47

STATEMENT ON COMPLIANCE
WITH LAWS AND. REGULATIONS
As required by the Government Auditing Standards we tested, as
appropriate given our audit scope and objectives, selected records,
procedures, and practices, to obtain reasonable assurance that the Office of
the Federal Detention Trustee (OFDT) and the U.S. Marshals Service (USMS)
complied with federal laws and regulations, for which noncompliance, in our
judgment, could have a material effect on the results of our audit. OFDT
and USMS management are responsible for ensuring compliance with federal
laws and regulations applicable to the OFDT and USMS. In planning our
audit, we determined that the Federal Acquisition Regulation §§ 3.101-1,
15.402, and 15.404-1 to 406-3 applied to how OFDT and USMS officials and
personnel negotiated intergovernmental agreements (IGA) and therefore
was significant within the context of the audit objectives.
Our audit included examining, on a test basis, whether the OFDT and
USMS complied with the aforementioned sections of the FAR insofar as they
were applicable to IGA negotiations performed using price analysis. Because
non-compliance with these sections of the FAR could have a material effect
on the operations of the OFDT and USMS, our audit interviewed responsible
officials and personnel performing negotiations, analyzed data, assessed
internal control procedures, and examined procedural practices and IGA
files. We found that by not ensuring that USMS specialists compiled
complete and contemporaneous pricing information prior to beginning
negotiations, the USMS and OFDT collectively could not demonstrate
compliance with FAR 15.406-1, which the USMS and the OFDT applies as
criterion to the IGA negotiation process and requires that government
negotiators document pre-negotiation objectives.
Our report provides recommendations that, once implemented, will
help ensure that the personnel and officials at the audited components
comply with the aforementioned regulation while negotiating IGAs.

48

APPENDIX I

OBJECTIVES, SCOPE, AND METHODOLOGY
Objectives
The Department of Justice Office of the Inspector General conducted
this audit to: (1) assess how the OFDT has implemented and the USMS uses
eIGA to negotiate jail-day rates, and (2) determine whether the OFDT price
analysis negotiation strategy has resulted in fair and reasonable jail-day
rates charged by state and local facilities.

Scope and Methodology
We conducted this performance audit in accordance with generally
accepted government auditing standards. Those standards require that we
plan and perform the audit to obtain sufficient, appropriate evidence to
provide a reasonable basis for our findings and conclusion,s based on our
audit objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit
objectives.
The scope of the audit encompassed OFDT and USMS policies,
procedures, and other activities involving IGA negotiations from November
2007 to September 2010. We used November 2007 as the timeframe to
begin our review because that was when the OFDT and USMS started using
eIGA in conjunction with price analysis to negotiate IGA jail-day rates. As
presented in the following sections, we obtained what we believe to be
necessary and sufficient documentation to achieve the objectives of this
audit.

Objective 1: Implementation and Use of eIGA
To assess how the OFDT has implemented and how USMS uses eIGA,
we reviewed the OFDT's eIGA strategy, obtained an understanding of OFDT
and USMS procedures, and reviewed documents showing how OFDT and
USMS applied eIGA with price analysis to negotiate jail-day rates. We also
reviewed correspondence between the OFDT and USMS and surveyed
training classes the OFDT provided to USMS personnel.
We performed audit work at USMS offices and OFDT headquarters,
both located in Arlington, Virginia. At these locations, we conducted
interviews with the OFDT Budget, Finance, and Forecasting Division,
Procurement Division, Information Technology Division, and OFDT

49

contractors. We conducted interviews and walkthroughs with relevant USMS
specialists and supervisors. The purpose of these interviews was to obtain
from OFDT and USMS personnel and officials an understanding of their roles
and responsibilities as well as any current directives and procedures
regarding elGA and IGA negotiations.
We also attended OFDT demonstrations on the elGA interface and
obtained read-only accounts to elGA to review selected samples and their
computerized records.

Objective 2: Price Analysis and Fair and Reasonable Jail-Day Rates
Between November 2007 and the start of our fieldwork in December
2009, the USMS negotiated 191 new or updated Intergovernmental
Agreements (IGA) with state and local governments. To determine whether
jail-day rates negotiated by the OFDT and USMS using price analysis
appeared to be fair and reasonable - in addition to the aforementioned work
in the first objective - we selected a sample of 25 IGAs and analyzed
documents in their respective agreement files. The purpose of this review
was to ascertain: (1) which price analysis techniques USMS specialists used
and the extent to which those techniques were applied; (2) the relevant
factors that USMS specialists and OFDT coordinators considered during the
negotiation process; and (3) the nature and extent of the negotiations that
occurred between the USMS and the detention facilities. To ensure the
completeness, accuracy, and validity of tested material, especially the price
negotiation memoranda that served as the basis for many of our
conclusions, we traced and verified information presented in IGA files as
necessary.
To select the sample of 25 IGAs, we employed a judgmental sampling
design to obtain a broad exposure to numerous facets of IGAs, including:
(1) proposed jail-day rates, counteroffers, and negotiated jail-day rates
(2) whether USMS specialists established and documented various and
available market-based prices during negotiations; and (3) the justifications
documented to show whether the rate was fair and reasonable. Once the
sample was selected, we compared the actual jail-day rate to a rate
calculated from facility-submitted jail operating e?<pense information (JOEl)
data. In assessing USMS specialist decisions for the market research and
historical government and contract price techniques, we relied whenever
possible on contemporaneous material available to the negotiating parties.
As the design of this non-statistical sample does not allow us to project
results to the overall universe of IGA rates and costs, we only used this
comparison to gauge whether price analysis techniques, as applied and
documented by the USMS, resulted in fair and reasonable jail-day rates.

50

Our audit considered detention pricing information compiled by and
received from the U.S. Department of Homeland Security, Bureau of
Immigration and Customs Enforcement (ICE). To determine the number of
detention facilities with both ICE and USMS rates, we compared the names
of facilities listed by ICE to facilities contained in USMS reports and counted
only those detention facilities which, in our judgment, were the same in both
sets of records. We also obtained and used annual price analysis guides
issued by the OFDT. These guides included schedules for the average IGA
rates by USMS district, the Federal Bureau of Prisons per capita cost, and
the listing of prices of private detention facilities. We further consulted, as
necessary, the American Correctional Association 2009-2010 National Jail
and Adult Detention Directory (ACA directory) for administrative information
pertaining to facilities, specifically their rated capacities and locations.
Although we did not assess the reliability of ICE detention rates, OFDT price
analysis guides, or information contained in the ACA directory, we do not
believe our reliance on this information affects the findings and
recommendations offered by this report.
Throughout the audit, we relied on computer-generated data to obtain
necessary information about detention facilities (size, location, jail-day rates,
and projected use data) and jail-day rates from eIGA and the Justice
Detention Information System (JDIS). JDIS is an information technology
system separately administered by the USMS and contains jail-day rate
information that is used by USMS specialists as other than cost or pricing
data during price negotiations. We also relied on electronically derived
information, such as price negotiation memoranda, obtained from eIGA to
conduct our assessment of price analysis. Although we did not assess the
reliability of such computer-derived information, we do not believe our
reliance on this data affects our findings and recommendations.

51

APPENDIX II

THE OFFICE OF THE FEDERAL DETENTION TRUSTEE'S
RESPONSE TO THE DRAFT AUDIT REPORT
u. S. Department or Justice
Office of the Federal Detention Trustee

Washing/on. D.C. 10530

February 24, 2011

MEMORANDUM TO:

RAYMOND J, BEAUDET
ASSISTANT INSPECTOR GENERAL
FOR AUDIT
OFFICE OF THE INSPECTOR GENERAL

FROM:

SUBJECT:

Draft Audit Report on the Intergovernmental
Agreement Detention Space Negotiation Process

This is in reply to your memorandum dated February I, 20 II, requesting a response on specifie
actions completed, or alternative actions proposed, on the subject draft audit report. The Otlice
of the Federal Detention Trustee (OFDT) has reviewed the audit report and provides the
following responses to recommendations for which this agency is responsible:
Recommendltion #5: Require that USMS specialists consistently use the estimated JOEl and
adjusted cord rates automatically calculated by elGA as starting points to help negotiate lower
. 'I-day rates:I
Jal
Response: OFDT disagrees, in part, with this recommendation. We recommend that the United
States Marshals Service (USMS) develop a Pre-negotiation Objectives Worksheet (POW) in
accordance with the Federal Acquisition Regulations (FAR), Sub-Part 15.406-1. While we agree
the JOEl rate calculation and adjusted core rate should be included in developing the
government's initial position, we do not believe, however, that it should become the default
negotiation position of the USMS, Moreover, the FAR, Sub-Part 15.406-1, states the following:
"pre-regOtiation Objectives
(a) TIie pre-negotiation objectives establish the Government's initial negotiation position.
They assist in the contracting officer's determination of fair and reasonable price, '!bey
should be based on the results of the contracting officer's analysis of the offeror's
proposal, taking into consideration all pertinent information including field pricing

52

assis4ce, audit reports and technical analysis, fact-finding results, independent
Government cost estimates and price histories."

I

With that said while we disagree with the OIG on portions of this recommendation, we do
understand that the OIG's purpose for this recommendation is to ensure that the USMS
establishes a ~und negotiation position prior to discussions with the local government, and that
that position be based on all pertinent information available to the USMS. At this time, we
believe that the USMS has developed a sound POW, which will be added to the elGA System.

r

Recommendation #9: Update elGA to calculate an adjusted core rate that includes
transportatio~ costs for requestingfacilities.

~e

Response:
OFDT concurs with the recommendation and will update the Core Rate
Calculation and add an adjustment when a local government proposes to provide transportation
as a service c6vered by the per-day rate. To that end, we anticipate having an updated Core Rate
calculation in place by June 30, 201 I.
I

Recommendation #13: Develop guidelines and conduct training to ensure that USMS
specialists know how to perform cost analysis properly to assess the allowability. accuracy. and
completeness ~fthe submitted JOEl data.
Response: .On August 13,2010, the Assistant Director for the USMS Prisoner Operations
Division appr&ved standard operating procedures (SOPs) for Intergovernmental Agreements.
As an attactmient to the SOP, the OFDT provided price/cost analysis guidelines (dated
April 21, 2010) to assist the IGA specialists with their negotiations.
On September 8,2010, OFDT provided Price/Cost Analysis training to the rGA specialists.
Additionally, the OFDT is requiring that all IGA specialists receive Level I Contracting
Certification Courses. Moreover, in Fiscal Years 2007, 2008, 2009 and 2010, the OFDT
provided the USMS with funding for acquisition training. At this time, we recommend also that
the IGA speci~lists receive training in "A-87, Cost Principles for State, Local and Indian Tribal
Governments.:' Training for the IGA specialists will be on-going, based on individual need, and
the OFDT will continue to provide annual training to the IGA specialists.

53

APPENDIX III

THE U.S. MARSHALS SERVICE'S
RESPONSE TO THE DRAFT AUDIT REPORT

~
~

u.s. Departmeat or JUJtice
United States MaIshals Service
Associate Directorfor Operalions
AID:muJria. Virginia 22301-102$

February 28, 2011

MEMORANDUM TO:

FROM:
SUBJECT:

Robert J. Finan II
Associate Director for
Response to Draft Audit Report:
IntergovCI11DlCDtal Agreement Detention Space
Negotiation Process

This is in response to correspondence from the Office ofthe Inspector General requesting
comment on the open recommendations associated with the subject audit report.
Should you have any questions or concerns regarding this response, please contact
Ms. Isabel Howell, Audit Liaison, at 202·307·9744.
Attachment

54

USMS Response to Draft Audit Report:
Intergovernmental Agreement Detention Space Negotiation Process

Recommendation 1: Develop procedures that require USMS specialists to consult available
detention facility infonnation sources to validate facility-prepared application data during prenegotiation planning.
Response (Concur): Please see the attached Pre-Negotiation Worksheet developed by the
Prisoner Operations Division (POD). This document is utilized by USMS specialists to annotate
revisions to the data provided by the facility, after consulting available detention facility
infonnation sources obtained from the Internet and USMS Detention Facility Investigative
Report. Prior to submitting a completed eIGA application, detention facilities must
certify/validate the accuracy of all infonnation.
Recommendation 2: Update eIGA and require that USMS specialists document the IGA
application data verification check within the eIGA system.
Response (Concur): The USMS will work with the Office of the Federal Detention Trustee
(OFDT) to add the Pre-Negotiation Worksheet to the eIGA system. Additionally, the USMS will
work with OFDT to establish a component within the eIGA framework for facilities to validate
updated infonnation that occurs during the pre-negotiation/negotiation process. OFDT reports
the eIGA system will be updated by August 1,2011.
Recommendation 3: Develop a standardized strategy sheet that includes entries for ICE jail-day
rates for requesting and nearby facilities, which the USMS specialists must complete prior to
IGA negotiations.
Response (Concur): If applicable, available Immigration and Customs Enforcement (ICE)
jail-day rates will be included on the Pre-Negotiation Worksheet from this point forward. OFDT
reports the eIGA system will be updated by August 1,2011.
Recommendation 4: Ensure that pricing infonnation is retained in the requesting facility's IGA
file by updating eIGA and requiring that USMS specialists enter the strategy sheet infonnation in
eIGA.
Response (Concur): All pricing infonnation is documented, incorporated into the IGA file, and
uploaded to the eIGA system. As noted in POD's IGA Standard Operating Procedures (SOP),
upon fmal execution of an IGA, the specialist will upload all documents into the eIGA system
and archive said file.
Recommendation 5: Require that USMS specialists consistently use the estimated JOEl and
adjusted core rates automatically calculated by eIGA as starting points to help negotiate lower
jail-day rates.

55

Response (Nonconcur): The JOEl and adjusted core rates do not always reveal the most
reasonable rate. Specialists consistently review all techniques to determine the most fair and
reasonable method to employ. According to the Federal Acquisition Regulations (FAR),
Sub-Part 15.404-1, there are several price analysis techniques available, with the comparison of
proposed prices to two or more offers and the comparison of proposed price to historical prices
paid by the Government for same or similar items/services being the "preferred techniques."
Using detention facility 1 in
, as noted on Page 19 of the audit
report, the estimated JOEl rate is $124. If the specialist used this rate as the starting point for
negotiations, the negotiated rate would have been $18 higher than what was actually negotiated
by the specialist. This, in tum, would have resulted in an estimated overpayment of$3,593,376.
The USMS believes the "starting point" for all negotiations should begin only after all available
resources, including the JOEl, have been considered, and to start with a price that is fair and
reasonable, and in the best interest ofthe Federal Government, dependent upon circumstances.
The USMS has developed a sound Pre-Negotiation Worksheet in accordance with the FAR,
Sub-Part 15.406-1 which captures the analysis of all price analysis tools.
Recommendation 6: Require that USMS specialists document and their supervisors approve the
reasons that the market research or historical price techniques are not used to justify and
negotiate a fair and reasonable jail-day rate.
Response (Concur): The specialist will document the reason why a price analysis technique was
selected and other techniques were not in the elGA system via the uploaded Pre-Negotiation
Worksheet. The supervisor can than indicate their approval through the elGA system, and
forward the application to OFDT. This process has already been initiated.
Recommendation7: Ensure that USMS specialists using the market research technique: (1)
consult third-party research materials to identify the universe of facilities that compose the
detention space market of the requesting detention facility; (2) document the specific
comparability factors of each requesting facility and apply these factors consistently to the
universe of detention facilities to identify as many similar facilities as possible; and (3) compare
proposed or negotiated facility rates to all facilities that, based on the documented comparability
factors, are similar to the requesting facility.
Response (Concur): Specialists are currently documenting this information on the
Pre-Negotiation Worksheet. The Pre-Negotiation Worksheet is maintained in the IGA file and
will be co-located within the elGA system.
Recommendation 8: Issue guidelines to require the USMS specialists using the historical price
technique: (I) identify whether government or contract facilities have similar attributes to the
requesting facility before using jail-day rates to justify a negotiated rate and (2) determine
whether the requesting facility has an ICE jail-day rate that can be considered and used before
finalizing a separate jail-day rate for the USMS.

56

Response (Concur): As currently outlined in guidelines established by the IGA SOP, specialists
are to use the historical price technique as a price analysis tool. This information will be
documented on the Pre-Negotiation Worksheet, along with the justification memorandum. As
noted above in the response to Recommendation #3, available ICE jail-day rates will also be
included on the worksheet, if applicable. USMS POD will contact ICE to obtain rates paid to
same facilities. The USMS will also work with OFDT to include ICE detention facility rates in
the elGA system, also referenced in Response #3.
Recommendation 9: Recommendation specifically addressed to OFDT.
Recommendation 10: Require that USMS specialists perform cost analysis on the JOEl data to
evaluate and verify the requesting facility's operating costs when: (1) different price analysis
techniques yield a very large range of results that do not align with estimated JOEl rates or (2)
the detention facility rejects offered price analysis rates.
Response (Concur): USMS specialists will perform cost analysis on the JOEl data when the
situation presents the criteria as listed in the recommendation. Going forward, this information
will be documented on the Pre-Negotiation Worksheet.
Recommendation 11: Implement a detention space action plan to move detainees to other
detention facilities whenever a requesting facility that is used to hold a large or disproportionate
number ofUSMS detainees demands an increase to its jail-day rate that cannot be justified by
price analysis or cost analysis.
Response (Concur; with conditions): The USMS agrees detention space action plans are
necessary, in specific instances. However, we do not agree this should be a preemptive
requirement placed upon USMS districts across the board. Currently, the USMS does formulate
and execute detailed plans to relocate prisoners when a situation warrants such action. The
USMS acknowledges that, when practical, these plans should be formal written documents that
are shared and approved by all stakeholders.
Recommendation 12: Require that districts designated by the annual detention status survey
with "emergency" or "serious" detention space needs to solicit additional IGA applications from
facilities within those districts.
Response (Concur): POD Senior Inspectors will work with districts in their assigned area of
responsibility to locate additional housing options in the event that the district has been
designated as being in an "emergency" or "serious" status concerning detention space. A report
is prepared annually that addresses "emergency" status districts, and details plans designed to
assist the districts with their detention space issues.
Recommendation 13: Develop guidelines and conduct training to ensure that USMS specialists
know how to perform costs analysis properly to assess the allowability, accuracy, and
completeness of the submitted JOEl data.

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Response (Concur): On August 13,2010, Assistant Director Candra Symonds, POD, approved
the IGA SOPs. As an attachment to the SOP, the OFDT provided price/cost analysis guidelines,
dated April 21, 2010, to assist specialists with negotiations.
On September 8, 2010, OFDT provided Price/Cost Analysis training to specialists. The
specialists are currently required to complete a 40-hour Price Analysis and Cost Analysis course.
In FY 2011, specialists will complete training in "PAR" and/or HOMB Circular A-87, Cost
Principles for State, Local, and Indian Tribal Governments. "
The OFDT will also responsd to this recommendation.
Recommendation 14: Implement a procedure within eIGA that formalizes and documents the
OFDT coordinator review of price negotiation memoranda. Such a procedure should: (1)
require that USMS specialists respond to each OFDT coordinator recommendation; (2) provide
the OFDT coordinator with the ability to ensure that the USMS specialist responses address the
recommendations; and (3) preserve the OFDT recommendations and USMS responses as part of
the permanent IGA file.
Response (Concur): Currently, specialists update the justification memorandum according to
OFDT recommendations. The system stores both justifications. The USMS will work with
OFDT to update and identify revisions entered into the system. OFDT will return all requests for
revisions/recommendations to the USMS via the eIGA system.
Recommendation 15: We recommend that the OjDT and USMS ensure USMS specialists
upload all documents used to negotiate the jail-day rate into eIGA.
Response (Concur): All supporting documentation is included in the IGA file and uploaded into
the eIGA system. The IGA SOP states that upon final execution of the IGA, the specialist will
upload all documents in the eIGA system and archive the file. The USMS will work with OFDT
to develop a component in the eIGA system to remind specialists to upload all documents prior
to archiving the application. The OFDT reports the eIGA system will be updated to
accommodate this recommendation by August 1, 2011.

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APPENDIX IV

OFFICE OF THE INSPECTOR GENERAL
ANALYSIS AND SUMMARY OF ACTIONS
NECESSARY TO CLOSE THE REPORT
The OIG provided a draft of this audit report to the OFDT and the
USMS. The OFDT and the USMS responses are incorporated in Appendices II
and III of this final report. The following provides the OIG analysis of the
responses and summary of actions necessary to resolve and close the
report.

Recommendation Number:
1. Resolved. The USMS concurred with our recommendation to develop
procedures that require USMS specialists to consult available detention
facility information sources and validate facility-prepared application
data during pre-negotiation planning. The USMS stated that it has
developed a new pre-negotiation worksheet for its USMS specialists to
use to validate detention facility data, including the detention facility's
physical address, reported detainee capacity, and whether the facility
is a new applicant for an intergovernmental agreement (IGA). The
pre-negotiation worksheet also contains fields that the USMS specialist
should use to detail the source(s) consulted to verify facility-provided
information. However, as discussed in our analysis of the USMS's
response to recommendation 3, the worksheet does not require that
the USMS specialist indicate whether nearby facilities have ICE
agreements.
The USMS also provided its policy on how USMS specialists should
prepare for IGA negotiations. However, this policy does not explicitly
require that the USMS specialist use the pre-negotiation worksheet
provided by the USMS in its response.
This recommendation can be closed once the USMS provides evidence
that the USMS specialists are required to complete a revised version of
its new pre-negotiation worksheet for validating facility-provided data.
2. Resolved. The USMS concurred with our recommendation to update
eIGA and require that USMS specialists document the IGA data
verification within the eIGA system. The OFDT subsequently
confirmed it is working with the USMS to adjust eIGA so that it will
electronically include the pre-negotiation worksheet and allow facilities

59

to validate updated information during IGA negotiations. According to
the USMS, this should be accomplished by August 1, 2011.
This recommendation can be closed when the USMS and OFDT provide
evidence, such as policy updates, eIGA manual revisions, and
computer screenshots showing that USMS specialists are using eIGA to
document their IGA data verification work.
3.

Resolved. The USMS concurred with our recommendation to develop
a standardized strategy sheet that includes entries for
U.S. Department of Homeland Security, Bureau of Immigration and
Customs Enforcement (ICE) jail-day rates for requesting and nearby
facilities, which USMS specialists should complete prior to IGA
negotiations. In its response, the USMS provided a copy of a new prenegotiation worksheet it has developed for USMS specialists to use as
a template strategy sheet. The pre-negotiation worksheet has fields
where the USMS specialist can indicate whether the requesting facility
has an ICE agreement. However, this worksheet does not provide a
space for the USMS specialist to indicate whether nearby facilities have
ICE agreements.
This recommendation can be closed when the USMS updates its:
(1) new pre-negotiation worksheet to provide fields for USMS
specialists to document whether facilities close to the requesting
facility have established detention agreements with ICE and their
respective ICE jail-day rates, and (2) policies to require that the USMS
specialist complete these fields on the pre-negotiation worksheet
before negotiating a jail-day rate with the requesting facility.

4.

Resolved. The USMS concurred with our recommendation and
reported it is working with the OFDT to update eIGA so USMS
specialists can use it to record IGA pricing information.
In its response, the USMS states that its policies require that USMS
specialists upload all documents into eIGA once the IGA is finalized.
However, our audit found incomplete pricing information maintained in
both hardcopy and electronic IGA files. USMS specialists should
upload information in eIGA throughout the negotiation process,
especially all information used to ascertain whether a jail-day rate is
fair and reasonable.
This recommendation can be closed when the USMS and OFDT provide
evidence that eIGA is updated and the USMS specialists are using it to
record complete IGA pricing information. Such evidence can include

60

USMS policy updates, screenshots of documents uploaded, and elGA
manual revisions.
5. Unresolved. The USMS and OFDT agreed that USMS specialists
should consistently consider the estimated JOEl and adjusted core
rates in developing the government's initial negotiating position;
however, they did not believe that these estimated rates should be the
default negotiation position.
The USMS stated in its response that the estimated JOEl and adjusted
core rates are not always the most reasonable rates. The USMS
provided an example of a facility where its estimated JOEl rate was
very high. As a result, using the estimated JOEl rate as a starting
point for negotiations could have resulted in more than $3.5 million in
excessive costs. The USMS also stated that the starting point for all
negotiations should begin only after all available resources, including
the JOEl, have been considered. The USMS therefore developed a new
pre-negotiation worksheet for USMS specialists to use to develop an
initial negotiation position based on all pertinent information - not just
estimated JOEl rates.
The OFDT stated in its response that it agrees that the JOEl rate
calculation and the adjusted core rate should be included in developing
the government's initial position. However, it does not believe, that
these rates should become the default negotiation position of the
USMS.
The purpose of this recommendation is to ensure that USMS specialists
establish a sound negotiation position prior to discussions with the
local government. As such, our recommendation to use JOEl and
adjusted core rates as starting points means that USMS specialists
should be required to consult JOEl and adjusted core rate data to
ascertain the appropriateness of the requesting facility's proposed rate
at the outset of the IGA negotiation.
When the USMS specialist receives a proposed jail-day rate from the
requesting facility, the USMS specialist needs to be in the position to
evaluate whether the proposed rate is fair and reasonable.
Although the updated pre-negotiation worksheet will help USMS
specialists improve how they document pre-negotiation objectives,
without evaluating proposed rates against the estimated JOEl rate and
the adjusted core rate - the preliminary data available to USMS
specialists at the outset of negotiations - we do not believe the USMS
specialist can carefully establish an appropriate negotiation position.

61

As noted throughout our report, USMS specialists have not been using
estimated JOEl rates - even when they are significantly lower than
proposed rates - to negotiate fair and reasonable jail-day rates.
Indeed, USMS specialists used JOEl rates to negotiate only 6 out of
the 25 sampled IGAs - despite the fact that the estimated JOEl rate
would have been lower than either the proposed or negotiated jail-day
rate for 12 additional IGAs. Because of this, the USMS appears to be
negotiating jail-day rates that provide facilities with significantly more
funds than they spend to house USMS detainees. We therefore believe
this inconsistent application of using JOEl rates (as well as adjusted
core rates) to gauge whether the proposed rate is fair and reasonable
has resulted in increased detention costs. However, in the occurrence
where the JOEl rate is higher than the proposed rate, the USMS
specialist can satisfy the recommendation by documenting this fact in
eIGA.
Therefore, this recommendation is unresolved. This recommendation
can be resolved when we receive evidence that the OFDT and USMS
have directed USMS specialists to use the JOEl and adjusted core rates
to evaluate facility-proposed rates at the outset of negotiations.
6. Resolved. The USMS concurred with our recommendation to require
that USMS specialists document and their supervisors approve the
reasons that the market research or historical price techniques were
not used to justify and negotiate fair and reasonable jail-day rates.
According to the USMS, specialists have begun documenting the
reasons why price analysis techniques were not used on the prenegotiation worksheet. In addition, the USMS reports that USMS
supervisors have begun to indicate their approval of these reasons in
eIGA.
This recommendation can be closed when the USMS provides evidence
showing that: (1) USMS specialists are noting on negotiation
worksheets why price analysis techniques, specifically market research
and historical prices, were not used to determine whether a negotiated
rate was fair and reasonable; and (2) USMS supervisors are reviewing
and documenting their approval of these reasons before the IGA is
finalized.

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7.

Resolved. The USMS concurred with our recommendation to ensure
that USMS specialists using the market research technique: (1)
consult third-party research materials to identify the universe of
facilities that compose the detention space market of the requesting
detention facility; (2) document the specific comparability factors of
each requesting facility and apply these factors consistently to the
universe of detention facilities to identify as many similar facilities as
possible; and (3) compare proposed or negotiated facility rates to all
facilities that, based on documented comparability factors, are similar
to the requesting facility.
In its response, the USMS stated that USMS specialists are
documenting this information on the newly developed pre-negotiation
worksheet. We note that this information was not being consistently
documented in the IGA files we reviewed as a part of our audit.
This recommendation can.be closed when the USMS provides evidence
showing that USMS specialists are required to conduct market
research properly in that they: (1) consult third-party research
materials to identify the universe of facilities that compose the
detention space market of the requesting detention facility;
(2) document the specific comparability factors of each requesting
facility and apply these factors consistently to the universe of
detention facilities to identify as many similar facilities as possible; and
(3) compare proposed or negotiated facility rates to all facilities that,
based on documented comparability factors, are similar to the
requesting facility.

8. Resolved. The USMS concurred with our recommendation to issue
guidelines to require that the USMS specialists using the historical
price techniques: (1) compare facilities with similar attributes and (2)
determine if the facility has a negotiated jail-day rate with ICE. The
USMS stated in its response that specialists will document historical
price technique data on the pre-negotiation worksheet and the
justification memorandum. Furthermore, the USMS will contact ICE to
obtain jail-day rates paid to the same facility, and work with OFDT to
include the ICE jail-day rates in the eIGA system. The policy cited by
the USMS in its response does not detail how USMS specialists should
appropriately perform the historical price analysis technique to
negotiate jail-day rates. This recommendation can therefore be closed
when the USMS updates its policy to require that specialists using the
historical price technique appropriately compare facilities of similar
attributes and consider a facility's ICE jail-day rate, as applicable.

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9.

Resolved. The OFDT concurred with our recommendation to update
elGA to calculate an adjusted core rate that includes transportation
costs for requesting facilities. The OFDT stated in its response that
they will update the core rate calculation and add an adjustment when
a local government proposes to provide transportation as a service
covered by the jail-day rate. OFDT anticipates the implementation of
this update by June 30, 2011.
This recommendation can be closed when the OFDT provides evidence
that eIGA has been modified to calculate core rates that include
transportation costs, as applicable.

10. Resolved. The USMS concurred with our recommendation to require
that USMS specialists perform cost analysis on the JOEl data to
evaluate and verify the requesting facility's operating costs when:
(1) different price analysis techniques yield a very large range of
results that do not align with estimated JOEl rates or (2) the detention
facility rejects offered price analysis rates.
This recommendation can be closed when the USMS provides evidence
showing that USMS specialists are required to perform and document
cost analysis when different price analysis techniques yield a very
large range of results that do not align with estimated JOEl rates or
the detention facility rejects offered price analysis rates. Furthermore,
such evidence should be specified in a policy that details what
constitutes a large range of results between rates yielded by different
price analysis techniques.

64

11. Unresolved. The USMS concurred in part with our recommendation
to implement a detention space action plan to move detainees to other
detention facilities whenever a requesting facility that is used to hold a
large or disproportionate number of USMS detainees demands an
increase to its jail-day rate that cannot be justified by price analysis or
cost analysis. Although the USMS agrees that detention space action
plans are necessary in specific instances, it does not believe that these
action plans should be preemptive requirements for "USMS districts
across the board."
The audit identified specific circumstances where the USMS needs to
be placed in a stronger negotiation position vis-a-vis detention
facilities that exploit USMS operational needs and detention space
shortages to raise jail-day rates. Our recommendation therefore
states that the USMS should work with district offices to develop action
plans to move detainees to different detention facilities whenever a
facility that houses a large or disproportionate number of USMS
detainees demands an unjustifiable rate increase. From our sample of
25 IGAs, we identified only 4 instances that, in our opinion, warranted
such an action plan. Further, during our discussions regarding this
recommendation with USMS and OFDT officials, it was agreed that the
situations triggering the development of an action plan - as detailed in
the recommendation - does not occur often.
Therefore, this recommendation is unresolved. This recommendation
can be resolved when the USMS agrees to strengthen its negotiation
position and begin formulating written and agreed-to action plans to
move detainees from facilities that: (1) hold a large number of
detainees and (2) demand unjustifiable rate increases.
12. Resolved. The USMS concurred with our recommendation to require
that districts designated by the annual detention status survey with
"emergency" or "serious" detention space needs to solicit additional
IGA applications from facilities within those districts. The USMS stated
in its response that USMS headquarters officials will work with districts
in their assigned area of responsibility to locate additional housing
options in the event that the district has been designated as being in
an "emergency" or "serious" status concerning detention space.

65

This recommendation can be closed when we review evidence that
USMS headquarters officials are soliciting additional detention facilities
in districts designated "emergency" or "serious" by the annual
detention survey. Such evidence should include documents that
evidence the initiatives undertaken by USMS officials to solicit new IGA
applications or additional detention space at current IGA facilities
within districts that are experiencing "emergency" or "serious"
detention space shortages.
13. Resolved. The USMS and the OFDT concurred with our
recommendation to develop guidelines and conduct training to ensure
that USMS specialists know how to perform costs analysis properly to
assess the allowability, accuracy, and completeness of the submitted
JOEl data. The OFDT and USMS stated in their responses that they
have approved procedures that provide price and cost analysis
gUidelines to USMS specialists. Additionally, the OFDT stated that it
provided price and cost analysis training to the USMS specialists in
September 2010 and further recommends that USMS specialists
receive: (1) contracting certification courses and (2) training in cost
principles for state and local governments.
We agree with the OFDT's proposal that USMS specialists receive
contracting certification courses. However, as noted in our report, the
negotiation training cited by the OFDT and USMS in the responses,
including the most recent September 2010 training, did not provide
the specialists with information on how to perform specific price
analysis techniques adequately. The training furthermore did not
detail the distinct role cost analysis has in the negotiation process and
that it should be performed only after price analysis cannot be used to
negotiate a fair and reasonable jail-day rate. The August 2010 policies
cited by the USMS furthermore do not specify exactly how USMS
specialists should conduct and document price analysis and cost
analysis.
This recommendation can be closed when we receive evidence
showing that: (1) USMS specialists have completed the proposed
contracting certification courses and (2) the USMS and OFDT have
updated guidance and training to ensure that specialists know how to
perform and document each price analysis technique properly.

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14. Resolved. The USMS concurred with our recommendation to
implement a procedure within eIGA that formalizes and documents the
OFDT coordinator review of price negotiation memoranda. The OFDT
subsequently has confirmed it is working with the USMS to update
eIGA so that it will identify revisions to the justification memoranda
uploaded to the system.
This recommendation can be closed when the USMS and OFDT provide
evidence showing that OFDT recommendations and USMS responses
regarding justification memoranda are preserved as part of the
permanent IGA file.
15. Resolved. The USMS concurred with our recommendation to ensure
USMS specialists upload all documents used to negotiate the jail-day
rate into eIGA. The OFDT subsequently confirmed that it is working
with the USMS to develop a component in eIGA to remind USMS
specialists to upload all documents prior to archiving the application.
The USMS and OFDT report that eIGA will be updated to accommodate
this recommendation by August 1, 2011.
This recommendation can be closed when we review evidence, such as
USMS policy updates and eIGA manual revisions, demonstrating that
USMS specialists are uploading all IGA negotiation documents to eIGA.

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